Virginia, Ohio use shared services, e-procurement to cut costs
Streamlining enterprise services and adopting e-procurement can yield savings and improve operational efficiency, according to a report released Thursday by the National Association of State Chief Administrators and the National Association of State Procurement Officials.
The report, titled “Pathways to Value: Shared Services and E-Procurement,” includes two case studies performed by Leadership for a Networked World, a Harvard University think tank focused on technological innovation. They outline initiatives by Virginia and Ohio, which have used shared services and e-procurement to help reduce costs and raise performance standards.
The collaboration between the three organizations emerged from an LNW-organized roundtable in early 2015, where leaders discussed the success and failure of innovation initiatives.
“This was NASCA’s first roundtable meeting and we were pleased to join forces with NASPO and LNW on these important topics,” NASCA’s President and Commissioner for Missouri’s Office of Administration Doug Nelson said. “Listening to the challenges faced by Ohio and Virginia reminded us that we shouldn’t be afraid of taking risk.”
In the wake of an internal Ohio government report that found that enterprise services costs were unusually high despite low quality standards, the state launched Ohio Shared Services in 2009. The project’s goal was to establish a smooth, standardized method of processing routine business transactions between state agencies and private vendors. Strategies included broad data analysis, structural reorganization and performance-based pay, like bonuses. According to the associations’ report, the state saved millions of dollars within the first year.
Similar circumstances prompted Virginia to create its Electronic Procurement System in 1999. Agencies faced numerous logistical hoops in ordering products. The report cites examples of multiple price lists with differing prices, product listing errors and a paper filing system that ate up employee work hours. Moving to a computer-based platform enabled leaps in organizational capability and improved public transparency. The program, now called eVA, has received national accolades for its progress.
In addition to the case studies, the report contains an action plan of important themes that emerged throughout the review process. The organizations hope that it will act as a model for states that wish to pursue similar innovative practices.
“With LNW’s facilitation, NASCA and NASPO attendees were able to come together as pairs to discuss government processes, systems and resources as components that can be put together in new ways, shared and shifted to meet policy and programmatic goals,” said NASPO President and Vermont Director of Purchasing and Contracting Deborah Damore. “Both the conference and follow up report were designed to help state chief administrators and chief procurement officers guide their organizations to more fluid and responsive organizational structures and business models.”
